One week after Microsoft laid off practically 2,000 workers in its gaming division, the Federal Commerce Fee is accusing Microsoft of contradicting its pledge to permit Activision Blizzard to function independently post-acquisition. The FTC filed a criticism in a federal appeals court docket on Wednesday, arguing that final week’s downsizing, which affected workers of Activision Blizzard, “contradicts Microsoft’s representations on this continuing.” The FTC is asking for a brief pause of Microsoft’s acquisition of Activision Blizzard because it additional investigates potential antitrust points.
In its arguments to the FTC over the previous two years, Microsoft mentioned it could deal with Activision Blizzard as a vertical acquisition and instructed that it would not must institute layoffs, since there can be no redundancies. On January 30, Microsoft introduced it was slicing 1,900 jobs throughout Activision Blizzard, ZeniMax and Xbox after figuring out “areas of overlap” particularly between Microsoft and Activision Blizzard. This discrepancy is the core of the FTC’s criticism.
“Microsoft’s recently-reported plan to remove 1,900 jobs in its online game division, together with in its newly-acquired Activision unit, contradicts the foregoing representations it made to this Courtroom,” the FTC’s criticism mentioned. “Particularly, Microsoft reportedly has said that the layoffs have been a part of an ‘execution plan’ that would cut back ‘areas of overlap’ between Microsoft and Activision, which is inconsistent with Microsoft’s suggestion to this Courtroom that the 2 firms will function independently post-merger.”
Although the UK’s Competitors and Markets Authority permitted Microsoft’s $69 billion acquisition of Activision Blizzard in October, the FTC hasn’t seen satisfaction concerning its personal antitrust considerations. The FTC continues to be difficult the acquisition, which implies there is a risk that Microsoft will probably be compelled to divest all or a part of Activision Blizzard.
In Wednesday’s criticism, the FTC argued that the current layoffs additionally undermine its personal capability to order reduction for workers who have been negatively affected within the acquisition.
Microsoft’s layoffs be part of an avalanche of mass firings within the online game trade, particularly up to now few months. An estimated 10,500 folks in video video games misplaced their jobs in 2023 — and already in 2024, 6,000 employees have been laid off.